What is an HSA? - Individuals
What is an HSA?
What is an HSA?
A Health Savings Account (HSA) is a tax-favored account you can establish for the purpose of paying for current and future qualified medical expenses. To take advantage of the tax savings offered by an HSA, you must be enrolled in a qualified high-deductible health plan, like Blue HSA Gold or Blue HSA Bronze.
What are the advantages of an HSA?
HSA funds can be used for qualified medical expenses that aren't covered by health insurance. You can use funds from an HSA to pay for acupuncture, fertility treatments, eye care and other qualified services that are not covered under your high-deductible health plan. HSAs function much like a 401(k) or IRA. Withdrawals from an HSA for qualified medical expenses are not taxed, no matter your age. Unused funds in the HSA rollover from year to year. HSAs default to a spouse or other beneficiary upon death. Enrolling in an HSA-qualified high-deductible plan allows you the opportunity to make tax-deductible contributions to an HSA. Additionally, funds placed in an HSA, as well as the interest that accrues, may continue to grow without federal taxation over the years.*
Am I eligible to open an HSA?
In order to establish an HSA, individuals must meet the following requirements:
- Be covered by a qualified high-deductible health plan
- Not be covered under another health insurance plan. Individuals with limited benefit policies, including dental, vision and worker's compensation, may still be eligible to establish an HSA.
- Not be enrolled in any part of Medicare (Parts A, B or D)
- Not be claimed as a dependent on another person's tax return
How do I open a Health Savings Account (HSA)?
Blue Cross does not administer HSAs. We have partnered with HealthEquity®, a non-bank custodian, to help you establish an HSA. To learn more about HSAs with HealthEquity®, please visit http://healthequity.com/alabamaindividual. To enroll in an HSA with HealthEquity®, visit Alabama.healthequity.com and select the "Enroll Individual" button toward the bottom right of the page. You may also contact your local bank to enroll in its HSA offering.
How much can I contribute to my HSA annually?
The maximum amount that you may contribute to your HSA annually is established by the Internal Revenue Service (IRS) and is adjusted from time to time by the IRS for cost of living increases. If you are between the ages of 55 and 65, the law also permits you to make an additional catch-up contribution each year. View the 2021 limitation on HSA deductions.
How do I get more information?
Download and print the Plan Brochure or more information on our health plans.